Dispute Adjudication Boards: A DAB hand

What’s all this about the RICS promoting the Dispute Adjudication Board (DAB) system? Oh well, better late than never. The RICS is so very well placed for moving along the DAB method of dispute managing, including dispute avoiding. At last RICS you are out of the blocks.

You have heard of adjudication. In the UK it’s an ordinary every day way of life in our construction industry. There will always be a 28-day adjudication clause in your construction contract, always, even if you haven’t written it in. We, in the UK were the first in the world to make the idea mandatory in every construction contract. Lots of other countries have now followed our example. Not mandatory, but older, and sometimes much better, is the Dispute Adjudication Board. The USA came up with the idea 20 or more years ago. Nowadays you will invariably find a DAB in mega projects across the world.

I can give first hand evidence and top quality opinion (mine) that the DAB is the most successful system of all for dealing with construction contract disputes. The DAB has a knack of stopping disputes in their tracks. Those of us who are fortunate enough to be part of DABs, all seem to say the same - it works ever so well.

I will tell you about a DAB I am now busy with. The board consists of three of us. The job is a major piece of civil engineering 1,500 miles east of Biggleswade. The board consists of one lawyer, one engineer and one quantity surveyor. On this job, the contractor chose one of the three and the employer chose one. Then the two “wing-men” (or women) choose the chairman. Sometimes an organisation like the RICS might appoint the chairman.

Those of us who are fortunate enough to be part of DABs, all seem to say the same - it works ever so well

Don’t think that because a DAB member is chosen by a party, partisanship will creep in. The DAB promises to be an impartial piece of machinery.

Now - here is the big difference to any other system. We three jump on an aeroplane at Heathrow every three or four months. We visit the project right from the start. Once there we are briefed on all the usual ups and downs. Once there we “feel” the job. Once there we get the feel of the contractor, his subcontractors, the engineer, the surveyors, the employer’s team, and the personalities. This is not at all like being an adjudicator, who is appointed out of the blue to wrestle with the history, the iffy memories, around a single dispute. Actually as a DAB we are told of “might be” disputes and we three DAB members smile, say nothing but sometimes raise, just fractionally, an eyebrow or six. The trick with a DAB is the regular visits and the briefing and the inspecting.

The board has a calming effect on the different parties. No one wants to appear to be a twerp, a troublemaker or an evil-tempered table thumper

Somehow the board has a calming effect on the different parties. For example, at our briefing meetings on site the concerns by the employer to progress and the concerns by the contractor as to underpayment are rehearsed in front of the board in a highly professional and measured manner. No one wants to appear to be a twerp, a troublemaker, or an evil-tempered table thumper. The atmosphere is always polite, informative and in good spirit.

Occasionally we, as a DAB, can see the usefulness of having a difference of opinion on the project brought to us for deliberation and binding decision as in any UK adjudication. The time scale is usually eight weeks from referral to decision. There is, oddly, a standard procedure in contract documents explaining how the DAB goes about its work. Notice immediately that it is three people who decide the difference of opinion that has been referred.

Here too, I am impressed by the way the three people in a dispute panel or board go about deciding the arguments put to us. Think about it - we have heard a day’s argument or evidence and then retire for a beer. We debate openly between us in an atmosphere of mutual trust, what views we have formed. It never surprises me when we three reach a unanimous view. I can tell you that there is a real chance of getting a decision that is sound on the facts and accurate on the law.

The downside, say some, of a DAB is that only large jobs can afford a threesome lump of fees. I am no longer convinced that this is a sound approach. Why? Because the DAB snuffs out disputes and that is a worthwhile investment for any modest size construction job.

Tony Bingham is a barrister and arbitrator at 3 Paper Buildings, Temple